Good day, and welcome to the ProPetro Holding Corp. Third Quarter 2024 Conference Call. Please note, this event is being recorded. I would now like to turn the call over to Matt Augustine, Director of Corporate Development and Investor Relations. Please go ahead.

Thank you and good morning. We appreciate your participation in today's call. With me today are Chief Executive Officer, Sam Sledge; Chief Financial Officer, David Schorlemer; and President and Chief Operating Officer, Adam Munoz. This morning, we released our earnings results for the third quarter of 2024. Please note that any comments we make on today's call regarding projections or our expectations for future events are forward-looking statements covered by the Private Securities Litigation Reform Act. Forward-looking statements are subject to several risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and risk factors discussed in our filings with the SEC. Also, during today's call, we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release. Finally, after our prepared remarks, we will hold a question-and-answer session. With that, I would like to turn the call over to Sam.

Thanks, Matt, and good morning, everyone. I'm pleased to report that, thanks to the hard work and disciplined execution of our team, ProPetro delivered strong results in the third quarter. Despite the challenging market environment for our industry, our free cash flow generation has been resilient, thanks to our clear strategy anchored by next generation investments and our focus on an industrialized operating model. Without question, we are seeing some of the same market softness as many of our peers. However, due to the strategic actions we have taken, we are generating strong, sustainable free cash flow while also taking market share. Over the last year, you have heard us state that 2024 is a prove-it year for ProPetro and we are doing exactly that. Let me walk you through how we are doing exactly that before turning it over to David to review our financial results. Fundamentally, we prioritize cash flow generation and remain well positioned to deliver positive cash flow going forward. Demand for our next-generation services is strong as we manage our portfolio to meet the needs of the industry of today and into the future. Currently, ProPetro has seven Tier IV DGB dual-fuel fleets, each bringing industry-leading diesel displacement. Simultaneously, we continue to execute on the rollout of our FORCE electric frac fleets, an effort that began with the deployment of our first FORCE fleet in August 2023. Our FORCE fleets have received positive reviews from our customers who appreciate the meaningful efficiency upgrades and the fuel savings of electrification. Earlier this year, we commenced our three-year contract with ExxonMobil under which we are providing hydraulic fracturing, wireline and pumpdown services with two committed FORCE electric fleets and an option for a third FORCE fleet, also with bundled wireline and pumpdown services. Looking ahead to the deployment of ProPetro's fourth and fifth FORCE fleets, we expect the fourth fleet to be deployed under contract by year-end, with the fifth fleet active in early 2025. We intend to continue the transition of our fleet by winding down investment in Tier II diesel-only equipment and instead prioritizing investment into more FORCE electric equipment. Not only do we fundamentally believe this is the way of the future and a clear path to sustainable success, but we are also derisking future earnings by leveraging the contracts this equipment demands. At ProPetro, we believe that a dynamic market requires a dynamic strategy. When it comes to capital allocation, that is exactly our approach. Our capital allocation strategy has three main tenets: fleet transition to electrification, value-enhancing M&A, and shareholder returns, and I'm pleased with our execution on all three fronts. Our dynamic capital allocation strategy is what has allowed us to opportunistically pursue acquisitions such as Silvertip in the wireline market, Par Five in cementing, and AquaProp in last mile sand solutions, which have all meaningfully contributed to our top and bottom line results. Our recent investments have also allowed us to stay ahead of the curve in transitioning to our FORCE electric equipment, all while delivering attractive returns. We've also mentioned before that deploying capital towards value-accretive acquisitions remains a strength at ProPetro and a key component of our strategy for growth and value creation. Moving forward, we will remain opportunistic as we pursue strategic transactions to profitably grow our business and better meet the needs of our customers. As I mentioned a moment ago, our electric fleet transition is well underway and we look forward to continuing that transition in 2025 and beyond. David will go into more detail about our share repurchase program in a moment, but I want to reaffirm to you our commitment to returning capital to shareholders. Earlier this year, we announced that our Board approved an increase and extension of our share repurchase program through May 31, 2025, with an additional $100 million authorized for a total of $200 million in the plan. Since the program's inception, the Company has acquired and retired 12.6 million shares, representing approximately 11% of our outstanding shares. We are incredibly proud of our ability to allocate capital to the highest return opportunities while consistently returning capital to our shareholders. Our recent successes demonstrate the strength of ProPetro's business. Our strong performance reinforces our belief that ProPetro shares are a unique investment opportunity and that the investment thesis is apparent in the discrepancy between our equity value and the strong financial performance evident in our results. While we are proud of the quarter we put together and our ability to continue generating strong profitability, the quarter was not without its challenges. Our wireline business continued to see some softness, and pricing across the conventional diesel-only frac market remains competitive, putting pressures on that part of our portfolio. While the second quarter saw some bad storms roll through the Permian, the third quarter actually uncharacteristically had more weather events, particularly in July and August. This resulted in a greater impact than anticipated. Although we did see softness across our sector, I'm pleased to report that much like in the second quarter, our bifurcated offering proved to be resilient. Our Tier IV Dual Fuel and Electric equipment buoyed our business, remaining highly utilized and high performing in the face of a softer market. Moreover, our cementing business continues to excel and capture market share as rig activity has declined. Another achievement in the quarter I want to highlight is another reduction, relative to guidance, of our capital expenditures. A few years ago, we were very clear about our CapEx strategy, and I'm proud of our success in achieving and surpassing those objectives. We expect to reduce capital spending to support strong free cash flow generation well into the future. Looking ahead, we remain confident in our ability to deliver strong financial results through the balance of this year and well into the future. I'd now like to briefly touch on our broader industry outlook and how we at ProPetro fit into that outlook. We are, of course, not immune to the macro headwinds facing our industry. Therefore, we are focused on controlling what we can, which includes taking decisive actions to protect service quality while ensuring that we maintain capital discipline and a strong balance sheet. Everything else flows just from that. Our goal is to become the go-to completions provider that works for the consolidators of the E&P sector. So, looking at future M&A, as I mentioned earlier, we will always keep an open mind. Our focus in this area will be on value-accretive M&A that provides opportunities to scale our businesses through additional offerings that increase our commercial competitiveness without sacrificing free cash flow generation. Moving forward, we also remain optimistic about the strength and potential of North American onshore oilfield services over the next several years, particularly as the market moves in the direction of providers like ProPetro, which offer lower costs to customers through things like fuel savings while also providing enhanced efficiencies. We are confident that ProPetro is positioned as a leader in this arena. Before I turn it over to David, if I can distill where we are today and why we are confident about the future into three key points: first, with our best-in-class team, we are pursuing and achieving operational excellence and have the strong, deep, blue-chip customer base to match. Second, with an eye towards the future, our electric transformation is well underway and garnering resilient contracts in a high-demand environment. And finally, with healthy liquidity, a clean balance sheet, and a strategy that derisks future earnings, we are positioned to deliver value for our shareholders while opportunistically pursuing accretive organic and inorganic growth. With that, I'll turn the call over to David to discuss our third quarter financial results.

Thanks, Sam, and good morning, everyone. You may hear a few things repeated this morning, but they are important to understand what has transpired at ProPetro. As Sam mentioned, we continued to showcase the industrialized nature of our business in the third quarter, and although market headwinds persisted, sequentially we generated strong returns and increased Adjusted EBITDA while continuing to advance our strategy. While short-term working capital headwinds impacted free cash flow, adjusted EBITDA less incurred capital expenditures remained strong. In the third quarter, we grew market share despite softness across our conventional Tier II diesel-only equipment and wireline offerings, along with meaningful weather impacts in the Permian. Revenues increased 1% versus the second quarter to $361 million, net loss was $137 million, and adjusted EBITDA increased 8% sequentially to $71 million. Adjusted net income excluding the non-cash impairment expense was $13 million compared to an adjusted net loss of $4 million in the second quarter of 2024. Additionally, we incurred an operating lease expense related to our electric fleets of $13 million for the quarter, as compared to $12 million in the prior quarter. During the quarter, we incurred a non-cash impairment expense of $189 million related to our conventional Tier II diesel-only pumping units and associated equipment. This decision was driven by a significant shift in customer preference away from Tier II diesel-only assets, which represent the lower end of the frac services market. After thorough analysis, we concluded that an impairment was necessary, resulting in assets being written down to fair value. Moving forward, we plan to cease capital investment in Tier II diesel-only assets and gradually phase them out over the next few years. These assets, which represent approximately 25% of our active fleets, will be decommissioned in the normal course in favor of our more environmentally-friendly alternative technologies. During the third quarter, a total of 14 hydraulic fracturing fleets were active, which was in line with our prior guidance. We expect to run 14 active fleets in the fourth quarter of 2024. For the last 18 months, we've continued to operate at this fleet level, plus or minus one fleet, which reflects the resilience in our business and the demand for our fleets relative to the market. Moving to our capital program, capital expenditures incurred during the third quarter of 2024 were $37 million, which were primarily related to maintenance and support equipment for our FORCE electric hydraulic fracturing fleet deployments. Net cash used in investing activities, as shown on the statement of cash flows, was $40 million for the quarter. As we have demonstrated this year, reduced capital spend is a strong tailwind for cash generation and a testament to the success of our fleet transition and optimization of our business. In fact, year-to-date cash CapEx is down 65% versus the prior year-to-date period. Due to the outstanding work by our team, we are reducing our full year guidance for the second time this year, with a lower range of between $150 million to $175 million, down from our most recent prior guidance of $175 million to $200 million. On the last call, I mentioned the strategic supply chain initiative that was beginning to yield results in OpEx and CapEx savings. Today, we're benefiting from the combination of improved operational discipline and these more discrete strategic supply chain processes, which have so far exceeded our expectations. What we're seeing play out at ProPetro with our reduced costs and lower capital spending intensity is a case study on what a committed team can achieve with the right mindset and resources. We are now integrating these efforts with our best-in-class enterprise systems deployments to drive even greater efficiencies in our business processes. Given industry stagnation, we continue to face a challenging environment. However, ProPetro's cash and liquidity position remains strong. As of September 30, 2024, total cash was $47 million, and our borrowings under the ABL Credit Facility were $45 million. Total liquidity at the end of the third quarter of 2024 was $127 million, including cash and $80 million of available capacity under the ABL credit facility. We expect the ongoing transformation of our assets to more FORCE electric fleets to drive further declines in associated OpEx intensity and maintenance capital spending, resulting in increased free cash flow in the coming years. ProPetro's improved cash generation profile allows us to more effectively execute our dynamic capital allocation strategy of continuing our fleet transition while also participating in accretive M&A and maintaining a strong balance sheet. Importantly, it also provides optionality to return capital to shareholders. In the third quarter, we remained active in our share repurchase program, retiring another 1.3 million shares. This brings our total number of retired shares to 12.6 million, which equates to approximately 11% of shares outstanding since the inception of the program in May 2023. This translates to the return of $107 million to shareholders. We have $93 million remaining under the current authorization, which extends to May 2025. As mentioned earlier, we recorded a non-cash impairment charge of $189 million of our Tier II diesel-only pumping units and related equipment. We view this impairment as a validation of the fleet transition strategy we began a few years back. The industry was heading toward lower emissions solutions and electrification, and we took decisive actions to move in that direction. We now expect that at year-end, we will have approximately 75% of our fleets comprised of next generation technologies that are natural gas-burning, lower emissions equipment. Recapitalizing our asset base with these industry-leading technologies and complementary premium completions services has required an investment in excess of $1 billion over the last few years. This significant investment has enabled our commercial and operations teams to engage our customers with confidence, knowing we bring best-in-class technologies along with ProPetro's superior field service to deliver the consistent industrial solutions they expect. We believe this is a winning strategy to drive durable earnings and cash flows. With that, I will turn the call back to Sam.

Thank you, David. To build on what David just said, and before turning to Q&A, I'd like to again reinforce ProPetro's compelling investment thesis and the recent actions we have taken to sustain meaningful cash flow generation while limiting our capital spend to further accelerate our true earnings growth trajectory. Despite headwinds impacting the energy services space, we believe our company is uniquely and favorably positioned. We have been successful in transforming our fleet, pursuing accretive M&A and executing on share buybacks, all while maintaining a healthy balance sheet and strong liquidity. The results you are seeing today are just the beginning, and we look forward to building on our progress long into the future. We have been successfully growing our market share in the Permian Basin with our sophisticated, bifurcated service offerings that include our next generation frac assets, Silvertip wireline services, and AquaProp wet sand solutions. Having these assets coupled with our top-notch customer portfolio and operational density in the Permian differentiates us and has helped us maintain stable frac activity and increase free cash flow through this cycle, even when overall activity in the market has fallen. Again, to reiterate, while market pressures persist, we are confident that we have the right assets and the right team to navigate the turbulence. Our best-in-class commercial architecture and disciplined pricing approach also support our strategy, and we believe that ProPetro is optimally positioned for the remainder of 2024 and beyond. We are also confident in our ability to capitalize on the evolution of the E&P industry as we see increasing consolidation. This upstream consolidation underscores the need for consistent service quality and seamless integration with next-generation industrial technologies, directly aligning with our strategy. Finally, I couldn't be prouder to lead this incredible ProPetro team. It is because of their dedication that we are able to confidently present and execute on this roadmap. To the whole ProPetro team, I thank you for your commitment; you are why we are winning and will continue to win here in the Permian Basin, the most prolific and important natural resource on this side of the world. With that, operator, I'll ask that we now open the line for questions.

We will now begin the question-and-answer session. And our first question comes from Eddie Kim with Barclays.

You mentioned that you expect your active fleets to remain steady at around 14 fleets in the fourth quarter. Can you provide some additional details on the utilization of those fleets? Some of your competitors are forecasting significant declines in activity from the third quarter to the fourth quarter in their completion businesses. I'm interested in what you are observing or what you anticipate regarding utilization.

As we stated in our materials, we do expect to hold fleet count flat. That said, I think the additional variable in there is just the usual holiday time-off around Thanksgiving and Christmas. We do expect a good bit of our customers to take off a few days around each one of those holidays. There's usually, as we sit here in late October, looking into November and especially the end of December, there's usually a bit of unknown too, especially at the end of the year, where there might be a day or two added to a handful of crews. So 14 crews active. And really, all we will be dealing with is just the normal holiday seasonality around those specific holidays.

Okay. So it doesn't sound like you expect meaningful utilization declines just based on those comments. Is that fair to say?

Yes, that's correct. I believe that in terms of equipment activity, there isn’t a significant change, but we might see a slight decrease in days worked or hours pumped. It’s important to emphasize that this reflects the strong operational performance of our team and the customers we partner with. The way we've placed our fleets within the portfolios of our customers allows us to maintain that level of activity in the fourth quarter, as we serve as the base load for many of our larger clients.

And then just my follow-up is on the contract duration on your FORCE fleets. You mentioned two of your FORCE fleets with Exxon are on three-year contracts. Could you just remind us what the contract duration is on the fourth and the fifth FORCE fleets you expect to deploy here in the coming months? And are those two FORCE fleets with different operators? So by the time you deploy that fifth FORCE fleet early next year, is it correct to say that you'll have four different operators across those five FORCE fleets?

Yes. Once we deploy the fifth fleet, it will be with four different customers. We will probably keep the details about the contract terms private as some of that information is competitive. However, we consistently strive for multiyear agreements. I can say that confidently. On an individual customer basis, we make every effort to focus on their specific needs to provide the best solutions. Personally, I believe the electric operation is performing better than anticipated. Our operating efficiencies are at record levels, and our customers are very satisfied. We aim to expand this in the coming years.

And our next question comes from Waqar Syed with ATB Capital Markets.

I would like to seek further clarification on the previous question. Some of your competitors are predicting a revenue decline of about double digits quarter-over-quarter in Q4. How do you interpret normal seasonality, and considering there were weather impacts in Q2, do you think that will also affect Q4? What is your outlook for the quarter-over-quarter revenue change?

I am going to let David speak to some of the detail there.

We're expecting just into the double-digit range on the low end there. And I think, again, as Sam mentioned, this is mostly driven by the normal seasonality that you're going to get. But overall, we've got active fleets operating consistently through the quarter.

In terms of your working capital, we noticed some cash outflows, particularly a significant decline in your payables and a reduction in days payable. What was the reason for that? How do you anticipate this will trend in Q4 and beyond?

Yes. As I mentioned, we've been working on some strategic supply chain initiatives, some of which have included building in a bit more goodwill into our working capital position. If you look at our balance sheet over the last 18 months, not only has our asset base improved dramatically, but also our working capital position. And so that's something that we did see during the quarter. I think that we're in a good spot where we are today and don't see any further declines in that, call it, AR minus AP spread, but that's something that we did. We felt it was appropriate and are benefiting from that in other ways in the form of discounts and other improvements in our cost structure.

Okay. And your fourth and fifth fleets and beyond, how do the economics of those compare to the first three that you built? And any future construction that happens in, let's say, 2025, do you think that's going to be still in terms of leases or do you expect to buy them outright?

I've said in the past that if we look at this very technically in our own book, we could make the comment that electric fleet pricing has gone up over the last year. It's not by a lot, but it's definitely slightly up, which adds to our conviction about the current and future opportunity of electrified equipment, specifically our FORCE equipment in the way we're operating and performing. Profitability is very good. I would say, without giving too much detail on that, it is good enough for us to continue investing in this and not investing in equipment that burns diesel, as we stated in some of our scripted remarks. I forgot what your second question was, Waqar?

Yes. Regarding the lease or buy, I mean, that's something that we're going to be looking at any time we are deploying capital. And we'll take the most favorable option that exists. We believe that there is some additional appetite there that can facilitate some additional leases. But we're going to be mindful of our total capital structure there going forward, and I think we're in a really good spot to have that option.

Yes. And to just add on what David said about lease versus buy on the fleet, for me, from my perspective, a lot of that depends on what does the rest of our business need and what are our plans from a capital investment standpoint. We talk a lot about dynamic capital allocation. We use that word a lot. And it really truly is that ensuring that we are deploying each additional dollar in the best place to create as much value as we can for the overall business. So it's just kind of a continual balancing and juggling act to put our investment dollars in the right spot.

And the next question comes from John Daniel with Daniel Energy Partners.

Sam, on the acquisition strategy, the last several deals have all been tied to ancillary services. Is that the trend we should expect going forward?

In general, yes. I think that's kind of where our focus is right now. That said, we're just heads up and eyes open in general. And given the state of the market, I think the bid and ask range kind of closing in, I think it's closed in up and down the value chain. I think you've seen the same thing in the E&P space. We're just keeping our eyes open in general. But to your point, to your specific question, we have been very curious and very inquisitive about what else is on the frac location with us. And with the exception of the Par Five deal, which was more of a geographic expansion for our cementing service line, which has been performing extremely well, better than expected. With the exception of the Par Five deal, the strategy has been exactly that to try and spread out on location, capitalize on some of the less capital-intensive services that we work alongside.

One thing I'd just like to add there is we've talked a lot about our fleet transition. We believe that we've got the best fleet in the industry. So I think to Sam's point, looking at other areas probably is the preference. We don't see any other assets in our primary service line of the quality of ours.

And then on to that end, David, with the Tier 2 impairments, I'm just doing my dumb guy math, if there are 14 active fleets, seven are DGB, three electric, that means four are Tier 2. Were those four that are working part of that impairment?

Yes. The entire Tier 2 asset base that we own today was impaired. And so some of those assets are not working. Some of them are in circulation, but the entire Tier 2 asset base was impaired.

Okay. And then just one final one from me. I'm not sure if you would answer it, but I'll try anyways. You got the electric fleet coming in '25. Your press release suggests more could be ordered. Is the working plan today to just use those fleets to swap them out with the other Tier 2s that are working, or given that it's probably a contracted fleet, and given that I'm guessing the person using your Tier 2 is not someone who'd be buying electric, you keep those Tier 2 running, if that makes any sense?

Yes. I mean just for reference, I look back over the last approximately three years, we've retired in excess of 300,000 horsepower. So there's a lot of attrition happening outside of our business and many of our small competitors, but we experience everyday attrition because you can only run these engines and these units for so long. That said, as we look into next year, opportunities to deploy a fifth, likely a sixth, possibly a seventh fleet next year will all be in line with some of our regular attrition. We don't necessarily see the market expanding next year, very flat, maybe an opportunity. I think a really good outcome for us would be to bump up to maybe 16 fleets at the end of next year. But our realistic view is operating between 14 and 15 fleets next year. So as we bring in the additional one to two electrics, those will most likely be replacements of conventional assets that will be retired.

And the next question comes from Scott Gruber with Citigroup.

With your fleet high-grading and the cessation of investment in the legacy Tier 2 pumps, how should we approach the topic of your frac maintenance expenses going forward? What is the trend looking like on a per fleet basis?

Down significantly. Down so much so that we've had to right-size our maintenance organization just this year as we've deployed multiple electric fleets. They don't come into the shop. We're doing almost all the maintenance on these electric fleets in the field. So it really changes our mindset and our approach to the support structure that that operation will need as it grows in the future. I don't know if Adam or David want to provide any additional detail there without saying any numbers; it's just down significantly.

Yes. I think if you were to come to our facility in Midland and walk around our maintenance facility, you wouldn't see the electric units in the maintenance base. That kind of speaks to the paradigm shift that we're experiencing here at ProPetro and also providing the continuous pumping out on location that I think customers are quite surprised at the capabilities. And so the team is doing a lot more with less maintenance intensity, and I think that's going to continue to trend favorably.

Another important point to consider is that for the past few years, we have been deliberately working to optimize various aspects of our operations. Many members of our organization have been involved in this initiative, and we have achieved significant success with several major components of our conventional units, such as engines, power-ends, and fluid-ends. In many cases, we have extended the lifespan of these large components. This has provided considerable advantages in terms of operational expenditures. Additionally, the internal optimization efforts, not only in our operations but also in our supply chain, including our purchasing strategies and supplier relationships, have enabled us to reduce our capital expenditure guidance for the second time this year. There are numerous factors at play, and I want to give credit to the team in Midland for achieving these positive outcomes.

Obviously, part of the original investment thesis was around reducing that capital intensity. So glad to hear it's playing out. And even if you guys don't want to provide a kind of per fleet number, would you be able to provide a kind of maintenance kind of ballpark number for the fleet as a whole given the mix and layering in the cementing and wireline, just kind of if you think about '25 and running the 14, 15 fleets with the makeup you have, kind of what's an all-in maintenance CapEx number for ProPetro?

Maintenance CapEx. Well, I think, look, we're working on our budgeting process right now. You can see what's going on in our P&L and the cash flow statement today. So I think that can provide pretty good guidance for the maintenance spend for next year. The things that we'll be evaluating as we get into our budgeting season will be what type of growth initiatives do we build into that versus which ones we might be able to finance. So I think give us some time, and we'll provide some more context. But generally speaking, we're seeing improvements of 25% to 30%, 40% relative to the new fleets that are being deployed. So we'll give you some more context on the next call.

And the next question comes from Kurt Hallead with Benchmark.

I just wanted to maybe tie up a loose end here in the context of you indicated your revenues to be down sequentially about 10%. So that would be what, about $30 million, whatever, $35 million. What do you think the decremental on that decline in revenue would be from an EBITDA perspective?

Decrementals probably in the neighborhood of 26% to 30%. And that's just going to be dependent on exactly how it plays out over the quarter. But we saw over 100% incrementals this quarter, largely attributable to the cost management. That's not something that you can sustain. But I think on the downside, we would expect somewhere in that neighborhood.

And then just a follow-up on, Sam, you kind of referenced electric fleet pricing has gone up slightly over the past year. When you look at your revenue per crew over the last couple of quarters and EBITDA per crew held pretty constant in a tough market environment. So obviously, that speaks to elements of your e-fleet. Can the same be said with respect to the DGB? Can you give us some context on how pricing is shaping up for that asset class?

I think everything falls on a continuum. As we discussed on this call, e-fleet pricing is the most resilient, followed by dual fuel pricing, while diesel pricing is the least resilient. The performance of dual fuel equipment depends on our specific applications, customers, and geography. Although it hasn't been as resilient as e-fleet pricing, it has performed significantly better than diesel equipment.

Okay. And then it's a heavy emphasis as you have continually on free cash flow generation. So just kind of curious, I know you're still kind of setting your budgets and everything else. But if we were to use a proxy for free cash flow conversion, where do you think that would land?

Well, this year, we'll be over 50%. We have been targeting kind of getting up to 30% to 50%. Next year, I think that range ought to be pretty good. So let us do our work on the budget process, and we'll provide some more context on the next call.

And the next question comes from Jeff LeBlanc with TPH.

I just wanted to see if you could give us an update on AquaProp and how the integration efforts are going into your frac fleets.

Sure. Yes, Aquaprop has been great. When we made the acquisition earlier this year, we had it on a few of our fleets already. I think we would all agree that our growth has probably not been as much as expected at this point in the year. That said, we've seen the sand market really change quite a bit. We've seen prices fall in dry and wet across the board. And what that does from my perspective, what that does when the sand market moves that hard, it creates a lot of noise. So it takes some time for everybody to kind of double us and our E&P partners and customers to double back and figure out what the most economic solutions are. It just creates a little bit more time, therefore creating an obstacle or two for us as it pertains to growing that business. We do still believe that that particular wet sand solution and the pile storage on location is going to be the most industrial and most cost-effective way to move and store sand on location. So in the long-term, we feel very confident about our ability to continue to fold that in commercially as we move into next year and into the future.

Next question comes from Stephen Gengaro with Stifel.

I guess two things from me, if you don't mind. And the first is probably kind of a medium-term question. But as the world evolves and most of the fleets that are active and marketed are electric or at least high-quality dual fuel assets, how do you maintain differentiation?

Yes. Our performance is rooted in the fact that we are currently experiencing a transitional period in our industry due to changing equipment. This change has been ongoing for several years, but I believe we are now in the midst of a shift toward a frac market that will primarily rely on natural gas. Early in such a transition, it's easier to distinguish ourselves with our equipment. However, as this transition progresses, it ultimately comes down to the people involved, as it always has. Our capability to assure customers of specific operating performance with our e-fleet or dual fuel fleet is critical. This assurance encompasses not just the hours we pump each day, but also safety and fuel displacement. We integrate all these factors into our agreements and then deliver and surpass those expectations. This capability is our key differentiator. We are confident that this is not something that can be easily replicated, as it requires being on-site with our team and fostering a competitive mindset every day. Recently, we had one of our e-fleets operate continuously for over 11 days, moving fluid 24 hours a day. During that month, the fleet achieved nearly 700 hours of pumping. Considering the total hours available in a month, that's nearly full capacity. We believe there's nothing more differentiating than that. We aim to continually raise the bar and work with customers who hold us to these standards, effectively creating a new market. We believe we are already making strides in that direction, and we anticipate continuing to differentiate ourselves in this way for the next few years.

And I just did the math. So that's a large number. The other quick one, just as it pertains to 2025, and I know it's just at a kind of a high level, the general commentary that we've heard from your peers and some others has been kind of expect flat from here through next year from kind of an activity level perspective. Is that in the ballpark of how you're thinking about it?

I think that's likely how we go into the year, Stephen. We do, given some of the differentiation that I just talked about, some other things that we've talked about on the call today, we do think there's going to be opportunity for us to continue to grab market share next year. So is it 14, 15 fleets going into next year? Yes, highly likely. I think if you're building a model on us, you should start the year with that level of activity. Does the market expand a little bit in the back half of the year? I think there's a lot of people hoping that. We'll see. We'll see what comes. That said, I don't think we here at ProPetro need to create a lot of financial value for our stakeholders necessarily need that. One thing that we haven't mentioned yet that I think should be noted is on top of just general activity, as we deploy additional e-fleets, we're creating a significant amount of accretion in our earnings. I think you saw some of that here in the third quarter as we had another full quarter effect of an additional e-fleet. From a margin cash flow profile standpoint, I think that's going to be a really important part of our 2025 story.

Yes. And Stephen, just to add to that, we entered 2024 really as a company that had one or two e-fleets going into the market. We were a new company as it relates to electric frac. Today, we're going to be exiting '24 really at the top of the market. I think our customers have realized that we're delivering industry-leading performance with the best technology in the marketplace, combined with that field service that really enabled us to make that transition over the last couple of years because of the people. So that's going to be a differentiating factor for, we think, some time to come because of that combination of technology and people and what ProPetro is known for. And that's not going to be new going into '25. It's going to be proven.

Our next question comes from Sean Mitchell with Daniel Energy Partners.

My question has been answered. Sorry, that was a misprint on my part. Sorry about that.

See you next week.

This concludes our question-and-answer session. I would like to turn the conference back over to Sam Sledge for any closing remarks.

Thanks, everybody, for joining us today. Thanks for your interest in the company. Hope to meet with you soon.

The conference has now been concluded. Thank you for attending today's presentation. You may now disconnect.